Google-Yahoo Deal Reeks of Collusion

By Clint Boulton  |  Posted 2008-04-24 Print this article Print

So now the Department of Justice is peering into the suspect deal Google and Yahoo struck two weeks ago to run Google ads alongside Yahoo's ads on Yahoo's search engine. I haven't been able to confirm this yet, but assuming it's true, it's something most people watching the sector suspected.

Google did well to get the DoubleClick deal past the Federal Trade Commission, but cozying up to search and online ad rival Yahoo was clearly a move to fling mud in Microsoft's eye as it seeks to buy Yahoo.

Yahoo could use the alleged $1 billion or so in cash the deal could generate. But Google didn't need to do the deal to enhance its position, not to the extent that it needed DoubleClick to boost ad serving and gain more relevant data on its customers.

So now the DOJ is looking at Google as a greedy gobbler. Microsoft said a Google-Yahoo tie-up would give Google 90 percent of the search market. That might be overstating it a bit.

Yet TechCrunch is right in painting a portrait of the Google-Yahoo deal as reeking of collusion.

Here's the key: The fact that the DOJ is looking into this means there is serious reason to believe the companies are going to be accused of scheming to mess with the market. Microsoft's fixation on Yahoo does not give Google the right to insert itself into the situation and play the Save Yahoo! card.

What I've noticed is that where the FTC might be hoodwinked or pushed around (some would argue that Google duped the FTC with misdirection to get DoubleClick), the DOJ bites into suspicious activity and bites hard.

Microsoft, the master of pushing the envelope of just business practices, learned that painful lesson years ago. This is why its general counsel, Brad Smith, rushed to cry foul over the hookup; he and his legal eagles know better than most how the DOJ views these things, and it isn't with kindness.

Does anybody not see the Google-Yahoo deal as suspect? Please explain to me how. Meanwhile, let's talk about how we got here. Will Microsoft and Yahoo strike a deal before Saturday? I say no, and that Microsoft will go hostile. You can guarantee it's already got that letter to shareholders drafted. |

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